Early rains, Pak conflict hit Coke's India biz: CEO
MUMBAI: The onset of early monsoons and the India-Pakistan conflict weighed on beverage giant Coca-Cola's growth in the June quarter in India, one of its key markets.In its earnings statement on Tuesday, the US-based company said that consolidated unit case volume declined by 1% as growth in Central Asia, Argentina, and China was more than offset by declines in India, alongside Mexico and Thailand. Unit case factors in the total number of unit cases of beverages sold by the company and its bottling partners.May and June, which are typically the peak summer months in India, are crucial for companies with a strong portfolio of summer products such as Coca-Cola, as they account for a bulk of most of their sales. The monsoon hit Kerala on May 24, eight days ahead of its normal arrival date of June 1, the earliest onset since 2009, hitting summer sales."In India, after a strong start to the year, volume declined as our business was impacted by early monsoons and geopolitical conflict early in the important summer season. In response, we are engaging consumers with integrated marketing campaigns," said James Quincey, chairman & CEO at The Coca-Cola Company during a post-earnings analyst call. Quincey said that the India-Pakistan conflict, though brief, added to growth woes, but did not elaborate on the matter.The firm's India unit did not respond to queries.The impact of the conflict, which lasted a few days in early May, was largely limited to parts of border regions including Jammu & Kashmir, Rajasthan, and Punjab. Coca-Cola has been ramping up its distribution in smaller towns and rural India.As the scourge of climate change becomes more intense, the company has also been betting on an all-weather strategy. "In India, it is never going to be a straight line and Q2 was not, but we are very bullish on India overall," Quincey said. Coca-Cola will focus on marketing and innovation to gain share in India. The appointment of a new CEO in its local bottling unit, Hindustan Coca-Cola Beverages, should also bring new energy, dynamism, and focus to the execution, the company said.
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